If you’re thinking about becoming a homeowner for the first time, it’s important to be prepared for all the responsibilities home ownership entails. While the buying process can be fun and exciting, there are several factors to consider before you put pen to paper. Use these three tips to help determine if you’re ready to buy.

1. You have a budget in place.

A common rule of thumb is to limit your monthly mortgage payment to 28% of your gross monthly income (before tax deductions). However, the costs of owning a home go beyond just the principal and interest on your mortgage. Additional expenses such as property tax, home insurance and your water bill will add to your overall budget. Review your recent bank statements and the balances of any debt (credit cards, student loans, etc). This will give you a better understanding of your current financial situation and home price range before you begin your search.

Cinfed's Mortgage Loan Calculator can help estimate how much home you can afford based on your monthly income, down payment, and interest rate in just minutes.

2. You have saved for a down payment.

In most cases, purchasing a home will require a down payment (normally between 3.0% to 20% of the home’s price) that acts as a deposit. Your down payment will give you immediate equity in the home (how much you owe compared to the value of the property) and demonstrate that you are financially stable to a lender.

Note: Your credit score and down payment amount can impact your interest rate on your mortgage and overall monthly payment. Larger down payments mean lower risk for lenders, which allows them to offer you a better interest rate or lower closing costs.

3. You’re connected with a real estate agent.

The home-buying process can get complicated and stressful, so it’s best to have a professional by your side to answer your questions and have your best interest at heart. Your agent will handle most of the communication with the seller and seller’s agent (if applicable), saving you time and limiting any nervousness throughout the process.

Usually, the seller will pay your realtor’s commission fee using funds from the sale of the home. So, you won’t have to adjust your budget to cover any agent-related fees out of pocket.

Buying a home is one of the biggest financial decisions you will ever make. Having a budget and down payment in place and working with a real estate agent you trust will help you get into the right home for the right price. If you believe you’re ready to become a homeowner, contact a Cinfed mortgage professional to get the process started today.

Are you an Ohio resident and plan to buy a home in Ohio? As you save for your down payment, you could earn more by taking advantage of an above-market rate! Find out more about the Ohio Homebuyer Plus program.